On Thursday 19 September, the Multilateral “Subject to the Tax Rule” Convention (STTR) was signed at the OECD. The convention is an integral part of the OECD/G20 Pillar II agreement to address base erosion in profit shifting (Pillar II: a lower global tax rate of 15% for multinational companies).
The overall commitment for Pillar II was signed on 8 October 2021 by the Greek Government, together with 135 other countries.
The STTR rule operates as a separate provision under a Double Taxation Convention and allows source countries to withhold tax on certain types of payments from related companies (such as royalties) that in the state of residence are either exempt from tax or taxed at a flat rate – after taking into account any preferential adjustments – of less than 9%.
The possibility of taxing the income of multinational companies transferred abroad without having been sufficiently taxed is of particular importance for developing countries. as it ensures that they receive a fair share of the tax revenues due to them, thus helping to protect their tax base.
Although Greece does not fall within the scope of the STTR Rule, our country, together with 24 other mainly developed economies, responded to the OECD’s call to sign the declaration in support of the STTR Rule that helps developing countries.
At the signing ceremony of the multilateral Convention, the declaration of support for Greece was signed by the Permanent Representative of our country to the OECD, Professor Giorgos Pagoulatos.